Diabetes mellitus is an escalating health problem throughout the world. Significant research efforts are currently underway to understand and prevent the pathogeneses of Type 1 and Type 2 diabetes, which both lead to the gradual loss of functional insulin-producing beta cells. In particular, many researchers are exploring methods to exploit embryonic and adult stem cells or unrelated somatic cell populations as alternative sources of insulin-producing beta cells. Progress is being made with many of these approaches; however, the efficient production of large numbers of fully functional beta cells has not yet been achieved, primarily due to our incomplete understanding of the mechanisms regulating normal pancreas development. We have identified Nkx2.2 as a critical regulator of the specification and differentiation of defined islet cell populations in mice. Notably, NKX2.2 null mutations in human patients have been identified; the pancreatic defects resemble those seen in Nkx2.2 null mice, confirming the importance of our studies for also understanding human pancreas development and disease. We have verified that Nkx2.2 functions as a transcriptional activator and repressor to regulate pancreas cell specification and islet cell identity. In particular, we identified and characterized many novel targets of Nkx2.2, including the essential islet cell specific regulators, NeuroD and Arx. We have also determined that Nkx2.2 is part of a large repressor complex that maintains beta cell identity in the embryo and in the adult. Our new preliminary data suggests that Nkx2.2 functions upstream of the Neurogenin3+ endocrine precursor population to regulate their differentiation potentials. Furthermore, we have determined that Nkx2.2 physically interacts with the maintenance DNA methyltransferase DNMT1 through its NK2-specific domain (SD) domain to mediate promoter- and cell-specific DNA methylation in the islet. Finally, we have demonstrated that Nkx2.2 mediates several distinct essential functions in the embryonic and adult pancreas through differential cell-specific activities. The goal of this application is to futher dissect the Nkx2.2 mediated regulatory and epigenetic events that are essential for islet cell specification, maintenance of islet cell identity and beta cell function. In Specific Aim 1 we will determine how the differentiation potential of Neurogenin3+ endocrine precursor populations is regulated. In Specific Aim 2 we will determine how Nkx2.2 initiates and maintains islet cell identity, and mediates adult beta cell maturation and function. In Specific Aim 3 we will determine how Nkx2.2 functions intersect with DNA methylation to exert distinct cell-specific regulatory functions in the pancreatic islet. Our long-term goal is to understand the intersecting transcriptional and epigenetic regulatory programs that specify and maintain functional islet cell types.